Editorial: Reverse the decline in seniors’ incomes

Seniors advocate Isobel Mackenzie has drawn attention to a potentially alarming trend. Across the province, seniors’ incomes have been falling. The largest drop came in 2014, the latest date for which we have figures. That year, elderly families saw their after-tax income decline to an average of $55,100 from $58,400, a fall of nearly six per cent. By comparison, families under 65 recorded an increase of nearly five per cent.

We’re calling this “potentially” alarming, because earnings figures sometimes jump around over the short run. But even if 2014 were an outlier, the truth is elderly families in our province have been losing ground for years.

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An older population and slightly longer lives are too small to explain the fall in incomes.

The price of housing might play a larger role. Accommodation costs have reached record highs, particularly in Victoria and the Lower Mainland. If elderly residents are being forced to cash in RRSPs or other investments to pay the rent, this might go some way toward providing an answer.

Seniors’ houses look like wealth on paper, but don’t translate into income. Investments that provided solid income in the days of 10 per cent interest bring in only a small fraction of that today.

The problem isn’t confined to B.C. Between 1994 and 2010, census figures show the poverty rate for seniors tripled across the country. It’s believed this downward trend has continued, with as many as 600,000 older Canadians now classed as poor.

This is a clear indication something is seriously amiss.

One of the most successful achievements of Canada’s safety-net programs was to sever the longstanding link between old age and privation. The Canada Pension Plan and Old Age Security transformed the scene.

Between 1978 and 1994, these programs, along with the Guaranteed Income Supplement, cut the poverty rate for Canada’s seniors to four per cent from 33 per cent. B.C. followed those figures.

But it appears these gains were fleeting. Older Canadians are once more losing ground.

One local option would be to raise the B.C. Seniors Supplement, a top-up received by 54,000 of the province’s poorest seniors. The supplement, which contributes between $600 and $720 per year, hasn’t been increased in more than 20 years.

Restoring the top-up to its original value would lift annual payments by $280 to $300. The additional cost — about $14 million — is easily affordable for the province.

But that only points to a deeper problem. Small increases like these, while welcome, will come nowhere near reversing the downward slide.

A national initiative is needed to help seniors across the country. Ottawa and the provinces have agreed to enrich the CPP program, but that will benefit mainly the younger generation.

Raising GIS payments would provide more immediate assistance, but these phase out at such low income levels — about $17,400 — that something more radical is needed.

The simplest solution would be to increase OAS payments. While these are taxed back from wealthier seniors, the program is far more generous to those with low incomes. The maximum payment for a single person is just under $7,000 a year. Raising that to $10,000 would go a long way to reversing old-age poverty.

What might that cost? Tax-back provisions make any calculation an estimate. However, OAS currently distributes about $45 billion a year.

We’re probably talking an additional $10 billion, possibly more. Obviously, that’s an immense sum, even in a federal budget of $300 billion.

But that only clarifies the problem. Simply stated, there is no cheap solution.

We need a national discussion, before the age-old link between retirement and poverty is reborn before our eyes.

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